Smuggled cigarettes sold in 43 percent of SA shops- Tax watchdog

Thupeyo Muleya Beitbridge Bureau

South Africa’s tax watchdog, Tax Justice SA has lambasted authorities in that country for failing to curb the smuggling of cigarettes and dealing of related counterfeit products.

Tax Justice SA founder, Mr Yusuf Abramjee said they were concerned with the state of affairs which is costing the neighbouring country of the much-needed import and tax revenue.

He said new research conducted by the independent market researcher, Ipsos, shows that at least 43 percent of shops in South Africa are selling smuggled cigarettes at below the minimum collectible tax.

Mr Abramjee said the neighbouring country was losing billions of Rands to the illicit dealings in the tobacco sector.

The smuggling of cigarettes between South Africa and Zimbabwe is rampant due to a restrictive duty regime being levied on all cigarettes imports from Zimbabwe by South Africa.

It is understood that Cigars, Cheroots, Cigarillos, and Cigarettes, of Tobacco or of Tobacco Substitutes imported into that country are charged at a rate of R6.21 per 10 cigarettes.

Most illicit cigarettes found in the neighbouring country including Pacific, Remington Gold, Mega, Dullahs, Branson, and Servilles are from Zimbabwe.

“Ipsos found packs of 20 selling for as little as R8, which is a fraction of the taxes that should be paid on them,” said Mr Abramjee.

“Criminal manufacturers are swarming the market. They’re making a fortune while the nation is looted of vital funds that could combat the pandemic and rebuild our shattered economy.

“The busts that have been trumpeted by SARS and SAPS recently are evidently just a drop in the ocean. For the sake of hard-working South Africans’ lives, livelihoods, and the rule of law, tackling this menace must be treated as a national priority.”